Vanessa
The European Banking Authority (EBA) has published comprehensive guidelines requiring payment service providers (PSPs) and crypto-asset service providers (CASPs) to enhance their compliance with EU and national sanctions.
The rules, set to take effect on Dec. 30, 2024, aim to tighten governance and risk management frameworks to prevent circumvention of restrictive measures and safeguard the EU financial system.
EBA Guidelines: Key Details
Released on Nov. 14, the guidelines mandate PSPs and CASPs to implement reliable screening systems for fund and crypto transfers to identify and mitigate risks associated with sanctions violations. Institutions are required to establish clear policies to manage operational, legal, and reputational risks arising from deficiencies in internal controls. The EBA emphasized that weaknesses in compliance could undermine the EU’s restrictive measures regimes, posing threats to financial stability.
The guidelines also address the interplay between sanctions compliance and broader governance structures, advising institutions to integrate these measures into their existing risk management frameworks. PSPs and CASPs must actively monitor transactions for suspicious activities and ensure that their systems can adapt to evolving sanctions requirements.
Legal Basis and Context
These measures follow the European Commission’s legislative package introduced in 2021 to overhaul the EU’s Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) framework. The regulations, adopted in June 2023, include stricter reporting requirements for fund and crypto transactions and direct the EBA to provide actionable guidelines for financial institutions.
The EBA’s initiative seeks to ensure a unified application of EU law across the financial sector while minimizing risks to compliance and operational integrity. By addressing vulnerabilities in both traditional and digital finance, the EBA highlights its commitment to protecting the EU financial ecosystem from exploitation and enhancing transparency across PSPs and CASPs.
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Vanessa has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Daily is an official media and publication of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
